Topic: If Banks make money out of loans then they should reward those who borrow - page 4. (Read 769 times)

It's better for us to know banks for what they are, some called them big time extortionist, while some say they are corperate financial loot homes, they are making alot of money from the same money me and you deposited with them in the bank when they make business with them and return nothing to us as interest, yet they will demand for an interest over the ones we lend from them, aside the charges they deduct from having our account with them as banks, I don't know hiw it would have felt if there were never an alternative like cryptocurrency to serve as substitute for using banks and their fiat.

What? You borrow money from the bank because you need it. And that's the service they provide. Why would you expect a reward when you benefit from it cause you got the money you borrowed in a short period of time. It's just that, in return of lending you money, they add interest.

It's a different case in Bitcoin. You get into Bitcoin for the purpose of getting a "reward" or profit from investing in Bitcoin. But if you're the one asking banks for money, why expect a reward? Unless it's you who's depositing money in banks cause they offer small interest (tho it's not enough to consider as a profit). It's the person to blame if he is getting into such a huge debt from banks because he didn't manage his finances well. And it's not banks fault because they did their part lending money to customers who needs it. You accept the terms and it's your decision to take it. It's just normal for banks to add interest if they lend money to people cause why would they offer lending services if they'd be getting nothing from it?
 

Loans, are people's need for money that they lack at some point. And that's what loans are for, for which you pay interest. The bank HELPED the person who was short of money. And you think the bank should be thanked for helping the person/company?
Maybe doctors, agronomists, and cab drivers should pay you extra for providing you with the services you need ?
Besides, you do not realize that interest for loans is the interest that the bank pays to those who put their money in the bank on deposit, and a part of it they keep for themselves - for the provided service and servicing of the loan. If you do not like bank loans - borrow from a neighbor/friend/acquaintance, and say that he still owes you a thank you for this, and then tell here what your neighbor/friend/acquaintance will answer you ?

By the way - you do not want to give me a loan, without interest, and pay me a reward ? No ? Why not?

I agree with you because a bank is a safe place to save all your money without rubbery and whenever you need the money you will get it without any problems. Banks give loans to make money because people who save their money in banks don't have anything to do with it, which is why they keep it there, and banks use the privilege to give out loans and charge interest when repaying the debt and making money. Anyone who runs a business does so for profit; running a business and not making a profit is a waste of time. Some people have stated that they lock their bank and concentrate on crypto, You mean you don't have anything to do with banks and you use crypto to pay all your bills, when you're in a country that doesn't accept crypto as an exchange how did you do, I didn't believe you because anyone that is business or investment needs both a bank account and a crypto wallet to save your funds.

Anyone who is in debt to bank is not a victim they were never get scammed, Bank is always transparent with their terms and condition, it might be tricky but it's always written on paper. If they can't pay their debt then they just made bad decision not a victim in any way.


With the exception of people who lived in a country where crypto is a legal tender (which is extremely rare now), I doubt that anyone is going full crypto. You will still need to exchange your crypto into fiat to buy stuff. And then except that you do all your crypto to fiat transaction in peer-2-peer in person, you will still need bank for money transfer when you exchanging your crypto to fiat.

Banks are companies. Companies are setup to make money, not act as charities. Taking in savings and paying interest on those deposits is the reward that they offer. People who are borrowing money sometimes don't pay it back and there is an "opportunity" cost on that money as well, where banks could be putting it into different ventures. The rate that banks charge is not pure profit, sometimes it has to offset losses and any administration involved. They also have to pay all their staff out of those profits, besides that borrowers are free to shop around for the best rates but there is definitely a floor to what banks can offer. You have not come up with some miraculous brainwave, rather you don't understand how banks have been working for hundreds of years.

its not as simple as the OP describes

banks dont use customers savings funds for mortgages directly.. the mortgage amounts are new money creation

however because a bank holds say an average of $25k per savings account holder. they can leverage that holding
they are allowed to create new money allocations upto 95% of money held

EG say a bank holds $5trillion in peoples savings.. (~200m people average saving $25k each)
it can generate/print another $4750billion. and spread that over upto 30 years mortgage timeline. meaning $158bill a year of mortgages can be generated/agreed each year(~3.16% a year money generation/printing)
and with the previous 29 years of current/outstanding mortgages making their repayments it refills the allocation just enough to allow $158bill next year
without touching bank customers savings accounts
if mortgage payers default. banks sell the agreement at discount to private investors to refill the allotment, and the private investors(debt recovery) then chase after unpaid debt which aims to keep the overall money creation allocation at 2%(after losses).. though this last 2 years has seen other money printing methods that have caused a 7-11% inflation, as oppose to the aim of only 2%
..
separately banks know not everyone spends all of their income/savings by withdrawing month to month. so banks put a certain fraction of those customers savings reserves into bonds/investment. where they make their interest profits

its these 'bonds' that are invested and given interest which touch bank savings customers value. which because its government bonds the government insures bank balance upto a certain limit of the FDIC.. its also these bonds that earn banks profit on the bond interest which the bank then give savings account holders a small amount of as "savings interest"
..
the funniest thing is, its actually credit unions that directly hand customers savings account balance out as loans

Don't compare banks and cryptocurrency directly but you can compare banks to exchange because they are both looking to make profit. Banks generate their profit from the customer through means that is not only loan and likewise exchanges do too. But cryptocurrency is not in itself made for interest or to generate profit but for the ease of financial transactions or option to payment system, so to compare banks that is established for profit purpose to the use of cryptocurrency will not be good measure. If you transfer your crypto to exchange or out of your wallet, you are also changed fees.

"If Banks make money out of loans then they should reward those who borrow" - this directly contradicts the idea of entrepreneurial banking. If the goal of banks is to earn money, then remunerating others is extremely unprofitable for them. Banks would rather reward themselves.

You can't wait for this.

But your friend is a voluntary victim of a fraudulent scheme, that’s the nuance. Nobody forced him to go to the bank.

The fact of the matter is that the traditional financial system cannot exist without banks. Banks will always be needed by someone. For example, a loan to start a business. Where do these businessmen get money to start their own business? Should them lend them from you? Will you reward him for borrowing from you, as you propose to do to banks?

If you don't want it, don't use it. What is the problem.

The funny thing is that binance is becoming a direct analogue of banks in the field of cryptocurrencies.

This will already be damage to property owned by the bank if your friend does not pay off the mortgage and the house does not become his property. With all the ensuing consequences.

When getting involved in a game according to the bank's rules, do not whine that the bank changes the rules at its own discretion.

When anyone is capable or qualified to get a loan from the bank, it is certain that they will get a lot of interest from the borrower. However, if the borrower did not use the money lent to him by the bank in a good way, it appears that the bank is out of business, whether the borrower used the money for good or bad purposes.

Now, about: As for the OP's title, I think the bank can do that by giving rewards to the borrowers so that they will be more willing to borrow again when they have paid what they borrowed.

Generally if you are borrowing money, you don’t get any rewards. One reward can be they offer you a lower interest rate. However you won’t get any rewards by borrowing money.

If you keep money in the bank then they will reward you by paying you interest. Then this money they lend out and charge more interest. However depending on the bank, the savings rate is small. So most put it in a money market.

if you are talking about the increase in interest, well its increasing just for the sake of mantaining economy basically fighting inflation as well as keeping the bank from bankruptcy, I think people misunderstood how difficult sometime it is to select some people that are worth for the money and willing to pay back the money not fooling around refusing to pay their loan and mortgages. your friend are the ones that requested the loan as well as the mortgage so he should be financially responsible about it, its not about banks trying to up the interests without notice its just that you've agreed with such rule the first time you are requesting loan from banks.
otherwise if thats so wrong it will be considered breaking the law but we all know that what banks are doing increasing rate and all, aren't breaking the law at all.
things might be unfair but thats just how it is, the banks are risking money by borrowing it to you, so of course they demand interests, the ones that borrow the money should be grateful enough to be given the money and consider that as a reward.

You have made a good choice because those who have adopted the BTC technology or any technology in terms of blockchain have known that what is the potential of cryptocurrency over banks. How banks are manipulating us and keeping us in the matrix of debt via their debating card system where they allow people easy access to money via debit cards anywhere and people in emotions (in any emotion) without thinking overuse this facility and become a victims of the debt cycle.

There are proper ways, books, and education that each individual has to learn before getting into finance, I can say for sure you did not read all of them but you still know the difference between both and that must be because you have experienced this whole journey of crypto which is full of transparency and security with lesser difficulties and documentations.

And if banks started to give money to the borrowers then from whom they will make money and the borrowers are not the only ones they used the money of, overall, IMHO I don't think we can really go out of this matrix created by banking system because it has been there for hell lot of years now that people want to trust it blindly instead of competitors.

This has always been the case. You deposit your money to the bank and they use it to give out loans, and then they’ll get back interest on this loan (good amount of interest monthly), but will only give you a little percentage yearly. Merely buying the right cryptocurrency can give you gains not to mention when you actually stake it (borrow it). And if they bank owe more than they can pay, they claim bankruptcy and there goes your money. You see how the money is yours but somehow isn’t? If there was no cryptocurrency, I’d still detest the way banks operate the profit they give people who deposit… it feels better to even open a business than let them have the money.

Stop bullshitting.  We get that banks profit by lending money, but that dont automatically make everyone using loans or credit some kinda victim.  Borrowing can be pretty smart if you need to buy something big or invest in stuff, as long as you are responsible and make the payments on time. 

your buddy's got a mortgage to pay for his house.  Thats super common - mortgages tend to be long-term with interest lower than other loans.  Makes them relatively affordable for major purchases like a house.  If your friend keeps making those mortgage payments on schedule, eventually he will own the place.  And that can be a solid investment - he gets a roof over his head now, and later on he can sell the house for a chunk of change if he wants.

Instead of criticizing the financial system, why dont you offer some constructive solutions? How else do you suggest that young people who are starting in life build wealth and achieve their financial goals?

I know banks give rewards especially to those who use their credit cards. From what I understand, he is the one who got a loan from the bank, why is the bank being blamed for the misuse of money. Everything you borrowed, you have to pay because you borrowed money, that's why you got into debt because you borrowed, you should blame that on your friend. So he got into debt because he got a loan. You have a choice not to get a loan if you can't pay back the money you borrowed from the banks. All loans have interest, that's how it is because it's a business.

We can be here all day and debate about what is right, wrong and fair but to these banks the number one job and occupation is to make profits and they do not mind doing it over at the cost of their customers. Is it same banks that deduct money anyhow and unsolicitedly from our accounts that you want to give rewards? I do not believe that they will do this even if they know that it's the right thing to do. You can never trust these banks because most of them have their interest attached first before that of their customers.

I'm still confused how people comes up with this idea of Bank to be listed on the black list forgetting how most Banks has helped secure fund from the old days where money and resources are being held in their homes making it easy for thief's to penetrate and rob them.

Our money is being borrowed and used by the banks but that alone wouldn't make me stop putting my money in the bank. holding my money in Bitcoin or any crypto will have every tendency of not getting my money the right time due to its volatile nature or may even get higher than what was stored  but it becomes a 50/50 chance so without taking any risk hold your money in the banks when you might need them in a short time and invest in crypto currency the left overs which you can do without even when needs arise.

Congratulations on being demanding, like it's you who deserve everything. I bet that if you rent a house and the owner increases the bill you'll say that you are not going to become a victim and won't pay.
Your friend is not a victim of the bank, it's just that he wants money, but doesn't want to play by the rules, pretty much like people who go to a casino and tell everyone the system is rigged antd they were cheated. It's all fun and games as long as they win, but when they lose it's the casino's fault.
No, the bank did not cheat your friend. He knew the game from the start, just that after a while he realized how much it's going to cost him.

Banks should reward borrowers but they don't and your choice is to either accept the rules and become the borrower, or don't accept it.

Logically, they should reward their loyal borrowers, but if they start to reward borrowers, the throve of borrowers will increase, thus, making these banks loose more than they make to people who can't payback the loans.

One way I know they reward borrowers is to give free coupons and reduced interest rates for early repayment. It only gets better with more borrowing and repayment as one's limit increases and options for longer repayment periods become available.